Bed Bath & Beyond Inc BBBY

We don’t plan to materially alter our $22 fair value estimate for no-moat Bed Bath & Beyond after incorporating fourth-quarter results. As such, we view the shares as modestly overvalued, even though they tumbled after the print. Net sales of $2.6 billion were in line with our forecast, and EPS of $0.40 came in roughly $0.10 ahead of our expectations, as selling, general, and administrative costs leveraged about 100 basis points better than our outlook, to 29%. Total comparable sales rose 4% in the period, ahead of our 1% projection, with the e-commerce channel rising 86% while store channel comps fell 20%. While significant digital progress was made over the year, driving e-commerce channel sales to 40% of the total (for the quarter and full year), we view this upswing as a catch-up to peers operating in the category rather than providing Bed Bath with a competitive edge from its higher digital exposure.